Red-light camera firm gets 6-month reprieve

January 11, 2013|By David Kidwell, Chicago Tribune reporter

Chicago's red-light camera program has grown to 384 cameras throughout the city since 2003. (John J. Kim, Chicago Tribune)

Chicago's embattled red-light camera operator got a six-month extension on its expiring contract while Mayor Rahm Emanuel's administration searches for a new vendor and awaits the results of a probe into the company's close relationship to the former city official who oversaw the program, the administration said Thursday.

Redflex Traffic Systems Inc., the Arizona-based company that has run the lucrative camera operation since it began in 2003, was strongly rebuked by the city late last year after the company's admission that it did not tell the city about internal allegations of corruption in the Chicago contract.

The city quickly barred the company from competing for the mayor's new speed camera initiative after Tribune disclosures about the company's relationship with city transportation official John Bills, who retired in 2011 and took a consulting job with a Redflex-funded marketing group.

Those allegations included the company paying for Bills' luxury hotel accommodations and giving a consulting contract worth more than half a million dollars to a Bills friend. Bills and his friend have denied any wrongdoing.

But the city has not decided whether it will also disqualify Redflex from competing to extend its five-year red-light camera contract that expires at the end of January.

"Given the information we had at the time, we took the step of prohibiting Redflex from bidding on the children's safety zone program," administration spokesman Bill McCaffrey said. "This was a substantial penalty and message to all contractors that we take matters of vendor conduct very seriously. As you know, the inspector general continues to review this matter, and we await his report before determining what action to take regarding the new red-light contract."

A draft copy of the city's "request for information" from potential bidders, expected to be sent out Friday, seeks "feedback from the vendor community" on any new equipment or technology, the transition process whether the city should own the new equipment, and any suggested performance standards under the new red-light contract. Answers will be due no later than Jan. 25.

McCaffrey said the city hopes to incorporate the information into its request for bids, which he said is expected to go out next month.

Meanwhile, the city is finalizing a decision on what company to hire for the speed camera initiative, which Emanuel is counting on for up to $30 million this year. That program would pepper the city with cameras to automatically tag speeders near public schools and parks.

The red-light camera program, which has grown to 384 cameras throughout the city since 2003, has raised more than $300 million in ticket revenue for the city and nearly $100 million in fees for the company. Experts have suggested the speed camera program could be worth more.

Redflex officials did not return calls for comment.

In October, the Tribune disclosed a 2010 internal memo written by a former Redflex vice president who made sweeping allegations about wrongdoing involving the Chicago contract. The company told the paper it sent one of its executives to "anti-bribery" training that year because he expensed a $910 luxury hotel stay for Bills. The company also said a Chicago law firm it hired found no merit to more serious allegations surrounding Bills' neighborhood ties to a man the company hired as a customer service representative at a $50,000 annual salary plus a $1,500-per-camera commission totaling more than $570,000.

In an Oct. 16 letter to Redflex, Emanuel's procurement director, Jamie L. Rhee, accused the company of covering up the 2-year-old breach in ethics and said the company's "failure to timely report this incident to the city is unacceptable behavior and is a failure by Redflex to act in the city's best interest."

After the Tribune reports, city Inspector General Joseph Ferguson opened an investigation, and Redflex's Australian parent company hired former city Inspector General David Hoffman to conduct another company probe of the allegations.

Redflex has employed a team of well-connected local lobbyists, including its lobbyist in Springfield, Chicago lawyer Michael Kasper, who represented Emanuel when his residency was challenged during his campaign for mayor.